OECD Sovereign Borrowing Outlook 2021

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This edition of the OECD Sovereign Borrowing Outlook reviews developments in response to the COVID-19 pandemic for government borrowing needs, funding conditions and funding strategies in the OECD area. It discusses the implications of the COVID-19 crisis on sovereign refinancing risk, and how to identify, measure and mitigate refinancing risk in light of country experiences. It then examines debt issuance trends for government securities in emerging market and developing economies in recent years, and presents novel insights on the impact of the COVID-19 pandemic on issuance conditions in these economies.


Revisiting sovereign refinancing risk in light of COVID-19 crisis

Sovereign refinancing risk is attracting more attention due to the impact of the COVID-19 shock on sovereign borrowing needs. The surge in government borrowings to finance COVID-19 stimulus and related bailout packages throughout 2020 mechanically increased the outstanding debt that must be refinanced in the future. While most governments in the OECD area today are paying very little interest to new borrowings across all maturities, the risk associated with the refinancing of debt at substantially higher rates is more of a medium- and long-term concern for most countries and a potential a short-term concern for at least some countries. Against this backdrop and from the perspective of a public debt manager, this chapter discusses how to identify measure and mitigate refinancing risk in light of possible scenarios as well as country experiences.


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